if the collie isnt aggressive with other dogs then just let them play. sometimes my dog will run up to a dog full speed while barking and it looks intimidating but once he gets to them he just sniffs and tries to play. just keep the leash on (not holding it) when they just meet so you can easily separate them if things do get too rough for your liking. and if they seem find with each other then take the leash off. your dog isnt going to be dog aggressive from rough play.
btw your dog barking and lunging while on leash is called leash reactivity. search for that term or for leash reactive in the google search bar above and you'll find lots of threads about it. mine also went through the same thing around 4-5 months of age.